EXHIBIT 5.16
SUBADVISORY AGREEMENT
THE PHOENIX EDGE SERIES FUND
SUBADVISORY AGREEMENT
December 20, 1999
Xxxxxxx Capital Management, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
RE: SUBADVISORY AGREEMENT
Gentlemen:
The Phoenix Edge Series Fund (the "Fund") is a diversified open-end investment
company of the series type registered under the Investment Company Act of 1940
(the "Act"), and is subject to the rules and regulations promulgated thereunder.
The shares of the Fund are offered or may be offered in several series,
including the Xxxxxxx Mid-Cap Value Series (collectively sometimes hereafter
referred to as the "Series").
Phoenix Variable Advisors, Inc. (the "Adviser") evaluates and recommends series
advisers for the Series and is responsible for the day-to-day management of the
Series.
1 Employment as a Subadviser. The Adviser, being duly authorized,
hereby employs Xxxxxxx Capital Management, Inc. (the "Subadviser") as a
discretionary series adviser to invest and reinvest the assets of the
Series on the terms and conditions set forth herein. The services of
the Subadviser hereunder are not to be deemed exclusive; the Subadviser
may render services to others and engage in other activities which do
not conflict in any material manner in the Subadviser's performance
hereunder.
2. Acceptance of Employment; Standard of Performance. The Subadviser
accepts its employment as a discretionary series adviser of the Series
and agrees to use its best professional judgment to make investment
decisions for the Series in accordance with the provisions of this
Agreement and as set forth in Schedule C attached hereto and made a
part hereof,
3. Services of Subadviser. In providing management services to the Series,
the Subadviser shall be subject to the investment objectives, policies
and restrictions of the Fund as they apply to the Series and as set
forth in the Fund's then current Prospectus and Statement of Additional
Information (as the same may be modified from time to time and provided
to the Subadviser by Adviser), and to the investment restrictions set
forth in the Act and the Rules thereunder, to the supervision and
control of the Trustees of the Fund (the
"Trustees"), and to instructions from the Adviser. The Subadviser shall
not, without the Fund's prior approval, effect any transactions which
would cause the Series at the time of the transaction to be out of
compliance with any of such restrictions or policies.
4. Transaction Procedures. All series transactions for the Series will be
consummated by payment to, or delivery by, the Custodian(s) from time
to time designated by the Fund (the "Custodian"), or such depositories
or agents as may be designated by the Custodian in writing, of all cash
and/or securities due to or from the Series. The Subadviser shall not
have possession or custody of such cash and/or securities or any
responsibility or liability with respect to such custody. The
Subadviser shall advise the Custodian and confirm in writing to the
Fund all investment orders for the Series placed by it with brokers and
dealers at the time and in the manner set forth in Schedule A hereto
(as amended from time to time). The Fund shall issue to the Custodian
such instructions as may be appropriate in connection with the
settlement of any transaction initiated by the Subadviser. The Fund
shall be responsible for all custodial arrangements and the payment of
all custodial charges and fees, and, upon giving proper instructions to
the Custodian, the Subadviser shall have no responsibility or liability
with respect to custodial arrangements or the act, omissions or other
conduct of the Custodian.
5. Allocation of Brokerage. The Subadviser shall have authority and
discretion to select brokers and dealers to execute Series transactions
initiated by the Subadviser, and to select the markets on or in which
the transactions will be executed.
A. In placing orders for the sale and purchase of Series securities for
the Fund, the Subadviser's primary responsibility shall be to seek the
best execution of orders at the most favorable prices. However, this
responsibility shall not obligate the Subadviser to solicit competitive
bids for each transaction or to seek the lowest available commission
cost to the Fund, so long as the Subadviser reasonably believes that
the broker or dealer selected by it can be expected to obtain a "best
execution" market price on the particular transaction and determines in
good faith that the commission cost is reasonable in relation to the
value of the brokerage and research services (as defined in Section
28(e)(3) of the Securities Exchange Act of 1934) provided by such
broker or dealer to the Subadviser, viewed in terms of either that
particular transaction or of the Subadviser's overall responsibilities
with respect to its clients, including the Fund, as to which the
Subadviser exercises investment discretion, notwithstanding that the
Fund may not be the direct or exclusive beneficiary of any such
services or that another broker may be willing to charge the Fund a
lower commission on the particular transaction.
B. Subject to the requirements of paragraph A above, the Adviser shall
have the right to request, but not dictate, that transactions giving
rise to brokerage commissions, shall be executed by brokers and dealers
that provide brokerage or research services to the Fund or that will be
of value to the Fund in the management of its assets, which services
and relationship may, but need not, be of direct benefit to the Series.
In addition, subject to paragraph A above and the applicable Conduct
Rules of the National Association of Securities Dealers, Inc., the Fund
shall have the right to request, but not dictate, that
series transactions be executed by brokers and dealers by or through
whom sales of shares of the Fund are made.
C. The Subadviser shall not execute any Series transactions for the
Series with a broker or dealer that is an "affiliated person" (as
defined in the Act) of the Fund, the Subadviser or the Adviser without
the prior written approval of the Fund. The Fund will provide the
Subadviser with a list of brokers and dealers that are "affiliated
persons" of the Fund or Adviser.
6. Proxies. The Fund, or the Adviser as its authorized agent, will vote
all proxies solicited by or with respect to the issuers of securities
in which assets of the Series may be invested. At the request of the
Fund, the Subadviser shall provide the Fund with its recommendations as
to the voting of particular proxies.
7. Fees for Services. The compensation of the Subadviser for its services
under this Agreement shall be calculated and paid by the Adviser in
accordance with the attached Schedule B. Pursuant to the Investment
Advisory Agreement between the Fund and the Adviser, the Adviser is
solely responsible for the payment of fees to the Subadviser.
8. Limitation of Liability. The Subadviser shall not be liable for any
action taken, omitted or suffered to be taken by it in its best
professional judgment, in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement, or in accordance with specific directions or
instructions from the Fund, provided, however, that such acts or
omissions shall not have constituted a breach of the investment
objectives, policies and restrictions applicable to the Series and that
such acts or omissions shall not have resulted from the Subadviser's
willful misfeasance, bad faith or gross negligence, a violation of the
standard of care established by and applicable to the Subadviser in its
actions under this Agreement or a breach of its duty or of its
obligations hereunder (provided, however, that the foregoing shall not
be construed to protect the Subadviser from liability under the Act).
9. Confidentiality. Subject to the duty of the Subadviser and the Fund to
comply with applicable law, including any demand of any regulatory or
taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Series and the actions
of the Subadviser and the Fund in respect thereof.
10. Assignment. This Agreement shall terminate automatically in the event
of its assignment, as that term is defined in Section 2(a)(4) of the
Act. The Subadviser shall notify the Fund in writing sufficiently in
advance of any proposed change of control, as defined in Section
2(a)(9) of the Act, as will enable the Fund to consider whether an
assignment as defined in Section 2(a)(4) of the Act will occur, and to
take the steps necessary to enter into a new contract with the
Subadviser.
11. Representations, Warranties and Agreements of the Subadviser. The
Subadviser represents, warrants and agrees that:
A. It is registered as an "Investment Adviser" under the Investment
Advisers Act of 1940 ("Advisers Act").
B. It will maintain, keep current and preserve on behalf of the Fund,
in the manner required or permitted by the Act and the Rules
thereunder, the records identified in Rules 31a-1(b)(5), 31a-1(b)(9),
31a-a(b)(10) and 31a-1(f) (as such rules may be amended from time to
time). The Subadviser agrees that such records are the property of the
Fund, and will be surrendered to the Fund or to Adviser as agent of the
Fund promptly upon request of either.
C. It has or shall adopt a written code of ethics complying with the
requirements of Rule 17j-1 under the Act and will provide the Fund and
Adviser with a copy of the code of ethics and evidence of its adoption.
Subadviser acknowledges receipt of the written code of ethics adopted
by and on behalf of the Fund (the "Code of Ethics"). Within 10 days of
the end of each calendar quarter while this Agreement is in effect, a
duly authorized compliance officer of the Subadviser shall certify to
the Fund and to Adviser that the Subadviser has complied with the
requirements of Rule 17j-1 during the previous calendar quarter and
that there has been no violation of its code of ethics, or the Code of
Ethics, or if such a violation has occurred, that appropriate action
was taken in response to such violation. The Subadviser shall permit
the Fund and Adviser to examine the reports required to be made by the
Subadviser under Rule 17j-1(c)(1) and this subparagraph.
D. Reference is hereby made to the Declaration of Trust dated February
18, 1986, establishing the Fund, a copy of which has been filed with
the Secretary of the Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed with
the Secretary of the Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed or
hereafter filed. The name The Phoenix Edge Series Fund refers to the
Trustees under said Declaration of Trust, as Trustees and not
personally, and no Trustee, shareholder, officer, agent or employee of
the Fund shall be held to any personal liability in connection with the
affairs of the Fund; only the trust estate under said Declaration of
Trust is liable. Without limiting the generality of the foregoing,
neither the Subadviser nor any of its officers, directors, partners,
shareholders or employees shall, under any circumstances, have recourse
or cause or willingly permit recourse to be had directly or indirectly
to any personal, statutory, or other liability of any shareholder,
Trustee, officer, agent or employee of the Fund or of any successor of
the Fund, whether such liability now exists or is hereafter incurred
for claims against the trust estate.
12. Amendment. This Agreement may be amended at any time, but only by
written agreement among the Subadviser, the Adviser and the Fund, which
amendment, other than amendments to Schedules A, and C, is subject to
the approval of the Trustees and the Shareholders of the Fund as and to
the extent required by the Act.
13. Name of Fund. The parties agree that the Fund may use the name
"Xxxxxxx", and any logos or service marks which the Subadviser may
furnish, only so long as this Agreement remains in effect, and that any
such use shall be royalty free. Upon termination of this Agreement, the
Fund shall discontinue the use of such name and any such logos or
service marks at the request of the Subadviser. The Fund acknowledges
that (i) it has no proprietary or exclusive rights in the same name as
"Xxxxxxx", or any logo or service xxxx furnished by the Subadviser, and
(ii) the Subadviser reserves to itself the right to grant the
nonexclusive right to use such name and any such logo or service xxxx
to other persons (including other investment companies).
14. Indemnification. Except as provided in Section 8, the Adviser agrees to
indemnify and hold harmless the Sub-Adviser from and against any and
all claims, losses, liabilities or damages (including reasonable
attorneys' fees and other related expenses), howsoever arising, from or
in connection with this Agreement or the performance by the Sub-Adviser
of its duties hereunder.
15. Effective Date; Term. This Agreement shall become effective on the date
set forth on the first page of this Agreement, and shall continue in
effect until December 31st, and shall continue in effect thereafter
only so long as its continuance has been specifically approved at least
annually by the Trustees in accordance with Section 15(a) of the
Investment Company Act, and by the majority vote of the disinterested
Trustees in accordance with the requirements of Section 15(c) thereof.
16. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other parties in the
event of a breach of any provision thereof by a party so notified, or
otherwise upon thirty (3 0) days' written notice to the other parties,
but any such termination shall not affect the status, obligations or
liabilities of any party hereto to the other parties.
17. Applicable Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of
the Commonwealth of Massachusetts.
18. Severability. If any term or condition of this Agreement shall be
invalid or unenforceable to any extent or in any application, then the
remainder of this Agreement shall not be affected thereby, and each and
every term and condition of this Agreement shall be valid and enforced
to the fullest extent permitted by law.
THE PHOENIX EDGE SERIES FUND
By:_____________________________________
Name:___________________________________
Title:__________________________________
PHOENIX VARIABLE ADVISORS, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
Accepted:
Xxxxxxx Capital Management, Inc.
By:_______________________________
Name: ____________________________
Title: ___________________________
SCHEDULE A
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OPERATIONAL PROCEDURES
In order to minimize operational problems, it will be necessary for a flow of
information to be supplied to State Street Bank and Trust Company (the
"Custodian"), the custodian for the Fund.
The Subadviser must furnish the Custodian with daily information as to executed
trades, or, if no trades are executed, with a report to that effect, no later
than 5 p.m. (Eastern Standard time) on the day of the trade (confirmation
received from broker). The necessary information can be sent via facsimile
machine to the Custodian. Information provided to the Custodian shall include
the following:
1. Purchase or sale;
2. Security name;
3. CUSIP number (if applicable);
4. Number of shares and sales price per share;
5. Executing broker;
6. Settlement agent;
7. Trade date;
8. Settlement date;
9. Aggregate commission or if a net trade;
10. Interest purchased or sold from interest bearing security;
11. Other fees;
12. Net proceeds of the transaction;
13. Exchange where trade was executed; and
14. Identified tax lot (if applicable).
When opening accounts with brokers for, and in the name of, the Fund, the
account must be a cash account. No margin accounts are to be maintained in the
name of the Fund. Delivery instructions are as specified by the Custodian. The
Custodian will supply the Subadviser daily with a cash availability report. This
will normally be done by telex so that the Subadviser will know the amount
available for investment purposes.
SCHEDULE B
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SUBADVISORY FEE
(a) For services provided to the Fund, the Adviser will pay to the Subadviser,
on or before the 10th day of each month, a fee, payable in arrears, at the
annual rate of 0.85% of the average daily net asset values of the Series up to
$75 million and 0.80% of the average daily net asset values in excess of $75
million. The fees shall be prorated for any month during which this agreement is
in effect for only a portion of the month. In computing the fee to be paid to
the Subadviser, the net asset value of the Fund and each Series shall be valued
as set forth in the then current registration statement of the Fund.
SCHEDULE C
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SUBADVISER FUNCTIONS
With respect to managing the investment and reinvestment of the Series' assets,
the Subadviser shall provide, at its own expense:
(a) An investment program for the Series consistent with its investment
objectives based upon the development, review and adjustment of
buy/sell strategies approved from time to time by the Board of Trustees
and Adviser;
(b) Implementation of the investment program for the Series based upon the
foregoing criteria;
(c) Quarterly reports, in form and substance acceptable to the Adviser,
with respect to: i) compliance with the Code of Ethics and the
Subadviser's code of ethics; ii) compliance with procedures adopted
from time to time by the Trustees of the Fund relative to securities
eligible for resale under Rule 144A under the Securities Act of 1933,
as amended; iii) diversification of Series assets in accordance with
the then prevailing prospectus and statement of additional information
pertaining to the Series and governing laws; iv) compliance with
governing restrictions relating to the fair valuation of securities for
which market quotations are not readily available or considered
"illiquid" for the purposes of complying with the Series' limitation on
acquisition of illiquid securities; v) any and all other reports
reasonably requested in accordance with or described in this Agreement;
and, vi) the implementation of the Series' investment program,
including, without limitation, analysis of Series performance;
(d) Attendance by appropriate representatives of the Subadviser at meetings
requested by the Adviser or Trustees at such time(s) and location(s) as
reasonably requested by the Adviser or Trustees; and
(e) Participation, overall assistance and support in marketing the Series,
as reasonably requested by the Adviser or Trustees including, without
limitation, meetings with pension fund representatives, broker/dealers
who have a sales agreement with Phoenix Equity Planning Corporation,
and other parties requested by the Adviser.
